A committee of 3 members should be set up for the process of dissolution. This committee will be responsible and authorized to sign the documents involved in the process. It is therefore wise to make sure the people involved will be available for this time. If, by any chance the board changes during the process of cancellation, this should also be changed which results in even longer delays.
Steps of Dissolution
The main steps of the dissolution are almost the exact opposite of setting up the entity, except the company chops will be in use to almost the end. An outline of the process is:
1.Tax Cancellation, both a the local and national tax bureaus
2.Liquidation Audit
3.(For trading companies) Customs Registration Certificate cancellation
4.Administration for Industry and Commerce cancellation
5.Newspaper Announcement of Dissolution
6.Commerce Commission cancellation
7.Bank Account cancellation
8.Certificate cancellation
9.Seal cancellation
All steps are following up one another. A main cause for delay is at the start of the cancellation. Your company needs to be fully compliant to all current rules and regulations. This is including, but not limited to:
1.Active office address (Yes, this implies that you need to keep paying rent during the entire process cancellation!);
2.Monthly tax declarations and bookkeeping;
3.No outstanding depts or lawsuits;
4.All relevant outstanding taxes paid.This often includes checking IIT payments for registered staff over the last years.
5.Up to date audits and renewals of licenses. Including annual inspection for tax and foreign exchange, preferably before dissolution starts.
6.Making sure everyting is settled accordingly with your (Chinese) employees at the end of registration.
When one fails to cancel your company, the names of the people involved (including legal representative and board of directors) are placed on a black list. If you are on this list, you will not be able to enter – or leave – China. People named on this list are sometimes allowed to enter China and then immediately arrested. Entrance and arrest is more likely if the monetary amounts are large or if a government agency is involved (taxes and fees).
Contact
If you wish to obtain more information or assistance, please contact us through the following and talk to our professionals:
Email: 2355725105@qq.com
Tel: +86-755-82143410/86-13823131503
Wechat:13823131503